Global wealth at all-time high of $241 trillion

Global wealth has increased 112 percent since 2000 to reach a new all-time high of USD 241 trillion.

| TNN | Updated: Oct 11, 2013, 07:11 IST

Two-thirds of adults in the world have wealth below $10,000 and together account for merely 3 percent of global wealth.

Global wealth has increased 112 percent since 2000 to reach a new all-time high of USD 241 trillion. In the same period India's wealth zoomed up by 300 percent – from USD 1.2 trillion to 3.6 trillion. This information has been revealed in the 2013 State of World Wealth Report prepared by Credit Suisse, a Switzerland based global bank.

The report also predicts that global will rise by nearly 40% over the next five years, reaching USD 334 trillion by 2018, of which, emerging markets will contribute nearly a third.

On the flip side, the Wealth Report throws up another stunning bit of data showing that inequality among people, and countries, may also be at its zenith. Two-thirds of adults in the world have wealth below USD 10,000 and together account for merely 3 percent of global wealth, while the 32 million dollar millionaires – 0.7 percent of world adults - own 41% of all assets. Even more disturbingly, within this group there are 98,700 individuals worth more than USD 50 million, and 33,900 are worth over USD 100 million.

The report used direct household balance sheet or survey data from 51 countries including India. These countries make up 97 percent of the world's population. The remaining 171 countries are projected from this database using regional standards.

The Indian and world wealth pyramids are somewhat similar in having a very broad base, a smaller but not insignificant middle portion and a quickly tapering top. The Indian pyramid – reflecting its nature of inequality – is somewhat broader at the base and tapers to the spire at the top rather drastically. Out of the top 393 million high wealth individuals in the world, an estimated 2.8 million, that is, 0.7 percent, are in India. At the bottom, some 90 percent of the country's population is below the USD 10,000 mark.

The bottom 70 percent of India's households own about 20 percent of the country's household or private wealth. In China, about 29 percent of the wealth is held by the bottom 70 percent of population. For comparison, share wealth owned by the bottom 70 percent of households in US is just 7 percent, in Germany just 13 percent and in Norway, just 12 percent.

The composition of Indian household wealth is different from most of the world's. In India, the bulk of the wealth – 86 percent in 2013 - was held in the form of non-financial assets, usually real estate. Financial assets made up just 15 percent of wealth. In contrast, in China, about 45 percent of wealth was in financial assets and 54 percent in non-financial assets.

In the global wealth context, about 1 billion individuals belonging to the USD 10,000 to 100,000 range of wealth are called the middle class in the report. The total net worth of this segment is estimated at about USD 33 trillion. India hosts just 4% of the global middle class, and the share has been rising quite slowly in recent years. China's share, on the other hand, has been growing fast and now accounts for more than one third of the global middle class.

The report estimates that there are 98,663 ultra-high net worth (UHNW) individuals in the world with wealth of USD 50 million or more. Of these, 33,900 are worth at least USD 100 million and 3,100 have assets above USD 500 million. There are 1151 individuals in the world who own over USD 1 billion wealth. The US has about 45 percent of such UHNW individuals. India has 1760, China 5830, Brazil 1700 and Japan 2890.

An interesting analysis of billionaires done in the report shows that being a billionaire is an unstable business. Of the 100 billionaires in the Forbes list of 2001, only 37 remained billionaires in 2013. The volatility associated with financial wealth is reflected in the fact that of the 100 billionaires in 2008, 26 had dropped out in 2009 due to the financial crisis. Of the 26 drop outs, 16 had entered the list for the first time.

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